Sensex falls for fifth session in six on derivatives, Iraq

The BSE Sensex and Nifty fell on Wednesday for a fifth session in six, with blue-chips such as Reliance Industries Ltd taking a hit as caution ahead of expiry of June derivatives on Thursday and fears of more violence in Iraq prompted investors to pare positions.

Auto stocks surged in the final minutes of trade after Finance Minister Arun Jaitley told reporters that India had extended excise duty concessions for automobiles, among other sectors. Mahindra and Mahindra rose 1.1%, while Maruti Suzuki India Ltd jumped 2.3%.

Investors remain hopeful of a pre-budget rally after the recent consolidation but say progress of the ongoing monsoon, deficient so far, holds the key. The Narendra Modi-led government is set to unveil its first budget on July 10.

"Government's expectation management and the Iraq crisis will set the tone for the short term. Also, after a 4-5 year lull, investors have got a reason to chase (in the budget) and we are bullish at this point in time," said Jagannadham Thunuguntla, chief strategist at SMC Global Securities.

The Sensex fell 0.22%, or 55.16 points, to end at 25,313.74, after marking its biggest single day gain since June 6 on Tuesday. The Nifty lost 0.14%, or 10.95 points, to end at 7,569.25.

Sugar stocks fell on profit-taking following a two-session rally after the food minister said on Monday that India would raise import duty on sugar to 40% from 15%, as the government tries to revive business at mills that owe farmers around $1.84 billion.